Neural circuits of the primary visual cortex are critical for generating accurate perceptions of our external world. These circuits are functionally organized across both the vertical and horizontal axes of the visual cortex. Nonetheless, the distinct contributions of vertical and horizontal projections to visual computation are poorly understood. In particular, the balance of excitation and inhibition (the E/I balance) that vertical and horizontal projections generate during sensory evoked activity is not well characterized due to a lack of appropriate methodology. The first goal of this proposal is to implement a new approach to selectively activate the vertical and horizontal projections for each layer of the cortex using a combination of cell-type specific gene targeting and optogenetic tools. The second goal is to use this new approach to test the hypothesis that vertical and horizontal projections generate layer-specific E/I balances in the cortex that determine their functional impact on cortical activity. The third goal is to establish how the distinct E/I balances that vertcal and horizontal projections generate in visual cortical circuits mediate the encoding of fundamental stimulus features such as contrast and size.